Question 1

The market demand curve for mousetraps is

Accepted Answer

A)  found by summing the prices of mousetraps at each quantity of mousetraps demanded by each buyer. 
B)  the horizontal sum of the individual demand curves for mousetraps of all the buyers. 
C)  found by summing the quantities of mousetraps demanded at each income level by each buyer. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct. 
A)  found by summing the prices of mousetraps at each quantity of mousetraps demanded by each buyer. 
B)  the horizontal sum of the individual demand curves for mousetraps of all the buyers. 
C)  found by summing the quantities of mousetraps demanded at each income level by each buyer. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct.

Question 2

To be part of the supply for a good, a producer must be

Accepted Answer

A)  both able and willing to supply the good. 
B)  both able and willing to supply the good, and have already sold the good. 
C)  only willing to supply the good. 
D)  only able to supply the good. 
E)  both able and willing to supply the good, and have already identified a buyer. 
A)  both able and willing to supply the good. 
B)  both able and willing to supply the good, and have already sold the good. 
C)  only willing to supply the good. 
D)  only able to supply the good. 
E)  both able and willing to supply the good, and have already identified a buyer.

Question 3

A popular dinner among university students today is sushi, green tea and wasabi dip, so these foods are complements. If the price of green tea increases and the price of wasabi dip increases, what would be the effect on the demand for sushi at lunch?

Accepted Answer

A)  The demand for sushi could increase or decrease. 
B)  The demand for sushi would increase. 
C)  The demand for sushi would be unaffected, but the price would increase. 
D)  The demand for sushi would decrease. 
E)  The demand for sushi would be unaffected, but the price would decrease. 
A)  The demand for sushi could increase or decrease. 
B)  The demand for sushi would increase. 
C)  The demand for sushi would be unaffected, but the price would increase. 
D)  The demand for sushi would decrease. 
E)  The demand for sushi would be unaffected, but the price would decrease.

Question 4

Suppose the equilibrium price of movie tickets is $10. If the supply curve for movies shifts ________, the equilibrium price will ________.

Accepted Answer

A)  rightward; increase 
B)  rightward; decrease 
C)  leftward; decrease 
D)  rightward; not change 
E)  leftward; not change 
A)  rightward; increase 
B)  rightward; decrease 
C)  leftward; decrease 
D)  rightward; not change 
E)  leftward; not change

Question 5

The above figure shows the market for t-shirts. If the price of t-shirts is $12, then

Accepted Answer

A)  there is a shortage and the price of t-shirts will fall. 
B)  there is a surplus and the price of t-shirts will rise. 
C)  there is a surplus and the price of t-shirts will fall. 
D)  there is a shortage and the price of t-shirts will rise. 
E)  the market is in equilibrium. 
A)  there is a shortage and the price of t-shirts will fall. 
B)  there is a surplus and the price of t-shirts will rise. 
C)  there is a surplus and the price of t-shirts will fall. 
D)  there is a shortage and the price of t-shirts will rise. 
E)  the market is in equilibrium.

Question 6

The number of logging firms increases. Which of the figures above best illustrates this change?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Figure A and Figure D 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Figure A and Figure D

Question 7

Pizza is a normal good. Which figure above shows the effect of a decrease in consumers' incomes?

Accepted Answer

A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Both Figure B and Figure C 
A)  Figure A 
B)  Figure B 
C)  Figure C 
D)  Figure D 
E)  Both Figure B and Figure C

Question 8

When laptops were first produced, the price was very high. As time passed, the price of personal laptops fell because

Accepted Answer

A)  the initial price was too high and nobody bought laptops. 
B)  the demand for laptops decreased. 
C)  there were technological advances in the production of laptops. 
D)  people's incomes increased and laptops are an inferior good. 
E)  None of the above answers is correct. 
A)  the initial price was too high and nobody bought laptops. 
B)  the demand for laptops decreased. 
C)  there were technological advances in the production of laptops. 
D)  people's incomes increased and laptops are an inferior good. 
E)  None of the above answers is correct.

Question 9

eBay

Accepted Answer

A)  is not a market because buyers can buy from only one seller at any point in time. 
B)  will be considered a market when the Internet firms become profitable. 
C)  is a market because buyers and sellers are brought together to buy and sell. 
D)  cannot function as a market. 
E)  would be a market if there were only one physical location. 
A)  is not a market because buyers can buy from only one seller at any point in time. 
B)  will be considered a market when the Internet firms become profitable. 
C)  is a market because buyers and sellers are brought together to buy and sell. 
D)  cannot function as a market. 
E)  would be a market if there were only one physical location.

Question 10

In the above figure, the movement from point a to point b reflects

Accepted Answer

A)  an increase in the number of producers of pizza. 
B)  a decrease in the cost of the tomato sauce used to produce pizza. 
C)  a decrease in income if pizza is a normal good. 
D)  an increase in the supply of pizza. 
E)  an increase in the price of pizza. 
A)  an increase in the number of producers of pizza. 
B)  a decrease in the cost of the tomato sauce used to produce pizza. 
C)  a decrease in income if pizza is a normal good. 
D)  an increase in the supply of pizza. 
E)  an increase in the price of pizza.

Question 11

If there is a surplus of a good, the quantity demanded is ________ the quantity supplied, and the price will ________.

Accepted Answer

A)  greater than; fall 
B)  less than; fall 
C)  equal to; fall 
D)  greater than; rise 
E)  less than; rise 
A)  greater than; fall 
B)  less than; fall 
C)  equal to; fall 
D)  greater than; rise 
E)  less than; rise

Question 12

The number of people looking to buy ceiling fans increases, so there is an increase in the

Accepted Answer

A)  supply of ceiling fans and no change in the price of a ceiling fan. 
B)  demand for ceiling fans and a surplus of ceiling fans. 
C)  quantity of ceiling fans demanded and a surplus of ceiling fans. 
D)  demand for ceiling fans and in the supply of ceiling fans. 
E)  demand for ceiling fans and a rise in the price of a ceiling fan. 
A)  supply of ceiling fans and no change in the price of a ceiling fan. 
B)  demand for ceiling fans and a surplus of ceiling fans. 
C)  quantity of ceiling fans demanded and a surplus of ceiling fans. 
D)  demand for ceiling fans and in the supply of ceiling fans. 
E)  demand for ceiling fans and a rise in the price of a ceiling fan.

Question 13

Teenagers drink more soft drinks than other age groups. If the number of teenagers increases, everything else remaining the same,

Accepted Answer

A)  market demand for soft drinks decreases. 
B)  market demand for soft drinks does not change. 
C)  there is a movement along the market demand curve for soft drinks. 
D)  market demand for soft drinks increases. 
E)  None of the above answers is correct because the effect on demand depends whether the supply curve shifts rightward, leftward or not at all. 
A)  market demand for soft drinks decreases. 
B)  market demand for soft drinks does not change. 
C)  there is a movement along the market demand curve for soft drinks. 
D)  market demand for soft drinks increases. 
E)  None of the above answers is correct because the effect on demand depends whether the supply curve shifts rightward, leftward or not at all.

Question 14

If macaroni and cheese is an inferior good, then a decrease in income results in

Accepted Answer

A)  a decrease in the demand for macaroni and cheese. 
B)  a decrease in the supply of macaroni and cheese. 
C)  an increase in the demand for macaroni and cheese. 
D)  an increase in the supply of macaroni and cheese. 
E)  Both answers A and D are correct. 
A)  a decrease in the demand for macaroni and cheese. 
B)  a decrease in the supply of macaroni and cheese. 
C)  an increase in the demand for macaroni and cheese. 
D)  an increase in the supply of macaroni and cheese. 
E)  Both answers A and D are correct.

Question 15

If both producers and consumers believe that a product's price will rise in the future, then in the present, the equilibrium price

Accepted Answer

A)  might rise, fall or not change, but the change can never be predicted. 
B)  might rise, fall or not change depending on whether the effect from the producers is greater or less than the effect from the consumers. 
C)  falls. 
D)  rises. 
E)  does not change. 
A)  might rise, fall or not change, but the change can never be predicted. 
B)  might rise, fall or not change depending on whether the effect from the producers is greater or less than the effect from the consumers. 
C)  falls. 
D)  rises. 
E)  does not change.

Question 16

Because of a sharp increase in the price of petrol, the demand for Sports Utility vehicles (SUVs) has decreased. So, the high price of petrol leads to a

Accepted Answer

A)  leftward shift of the supply curve of SUVs and no shift in the demand curve for SUVs. 
B)  rightward shift of the supply curve of SUVs and no shift in the demand curve for SUVs. 
C)  leftward shift of the demand curve for SUVs and the supply curve of SUVs. 
D)  leftward shift of the demand curve for SUVs and no shift in the supply curve of SUVs. 
E)  leftward shift of the demand curve for SUVs and a rightward shift of the supply curve of SUVs. 
A)  leftward shift of the supply curve of SUVs and no shift in the demand curve for SUVs. 
B)  rightward shift of the supply curve of SUVs and no shift in the demand curve for SUVs. 
C)  leftward shift of the demand curve for SUVs and the supply curve of SUVs. 
D)  leftward shift of the demand curve for SUVs and no shift in the supply curve of SUVs. 
E)  leftward shift of the demand curve for SUVs and a rightward shift of the supply curve of SUVs.

Question 17

Which of the following leads to an increase in the quantity supplied, but not an increase in supply?

Accepted Answer

A)  An advance in the technology used to produce the good. 
B)  An increase in the product's price. 
C)  A decrease in the costs of production. 
D)  An increase in the price of another product that the suppliers can produce. 
E)  An increase in the number of firms producing the good or service. 
A)  An advance in the technology used to produce the good. 
B)  An increase in the product's price. 
C)  A decrease in the costs of production. 
D)  An increase in the price of another product that the suppliers can produce. 
E)  An increase in the number of firms producing the good or service.

Question 18

The graph illustrates the market for bottled water. If the producers of bottled water switch to using improved technology, then the

Accepted Answer

A)  quantity demanded of bottled water does not change. 
B)  price of bottled water rises. 
C)  quantity demanded of bottled water increases. 
D)  supply curve shifts leftward. 
E)  supply of bottled water decreases. 
A)  quantity demanded of bottled water does not change. 
B)  price of bottled water rises. 
C)  quantity demanded of bottled water increases. 
D)  supply curve shifts leftward. 
E)  supply of bottled water decreases.

Question 19

A rise in the price of a substitute in production for a good leads to

Accepted Answer

A)  a decrease in the quantity of that good supplied. 
B)  an increase in the supply of that good. 
C)  no change in the supply of that good; instead there is a change in the quantity supplied. 
D)  no change in either the supply or the quantity supplied of the good. 
E)  a decrease in the supply of that good. 
A)  a decrease in the quantity of that good supplied. 
B)  an increase in the supply of that good. 
C)  no change in the supply of that good; instead there is a change in the quantity supplied. 
D)  no change in either the supply or the quantity supplied of the good. 
E)  a decrease in the supply of that good.

Question 20

Advances in productivity increase supply because they might

Accepted Answer

A)  raise the prices of resources used to produce the good. 
B)  increase the price expected in the future. 
C)  decrease the number of goods available. 
D)  increase the number of firms producing the good. 
E)  decrease the cost of production. 
A)  raise the prices of resources used to produce the good. 
B)  increase the price expected in the future. 
C)  decrease the number of goods available. 
D)  increase the number of firms producing the good. 
E)  decrease the cost of production.

The market demand curve for mousetraps is

To be part of the supply for a good, a producer must be

A popular dinner among university students today is sushi, green tea and wasabi dip, so these foods are complements. If the price of green tea increases and the price of wasabi dip increases, what would be the effect on the demand for sushi at lunch?

Suppose the equilibrium price of movie tickets is $10. If the supply curve for movies shifts , the equilibrium price will .

The above figure shows the market for t-shirts. If the price of t-shirts is $12, then

The number of logging firms increases. Which of the figures above best illustrates this change?

Pizza is a normal good. Which figure above shows the effect of a decrease in consumers' incomes?

When laptops were first produced, the price was very high. As time passed, the price of personal laptops fell because

eBay

In the above figure, the movement from point a to point b reflects

If there is a surplus of a good, the quantity demanded is the quantity supplied, and the price will .

The number of people looking to buy ceiling fans increases, so there is an increase in the

Teenagers drink more soft drinks than other age groups. If the number of teenagers increases, everything else remaining the same,

If macaroni and cheese is an inferior good, then a decrease in income results in

If both producers and consumers believe that a product's price will rise in the future, then in the present, the equilibrium price

Because of a sharp increase in the price of petrol, the demand for Sports Utility vehicles (SUVs) has decreased. So, the high price of petrol leads to a

Which of the following leads to an increase in the quantity supplied, but not an increase in supply?

The graph illustrates the market for bottled water. If the producers of bottled water switch to using improved technology, then the

A rise in the price of a substitute in production for a good leads to

Advances in productivity increase supply because they might

Getting Started

The Australian and Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 4: Demand and Supply

The market demand curve for mousetraps is

To be part of the supply for a good, a producer must be

A popular dinner among university students today is sushi, green tea and wasabi dip, so these foods are complements. If the price of green tea increases and the price of wasabi dip increases, what would be the effect on the demand for sushi at lunch?

Suppose the equilibrium price of movie tickets is $10. If the supply curve for movies shifts ________, the equilibrium price will ________.

The above figure shows the market for t-shirts. If the price of t-shirts is $12, then

The number of logging firms increases. Which of the figures above best illustrates this change?

Pizza is a normal good. Which figure above shows the effect of a decrease in consumers' incomes?

When laptops were first produced, the price was very high. As time passed, the price of personal laptops fell because

eBay

In the above figure, the movement from point a to point b reflects

If there is a surplus of a good, the quantity demanded is ________ the quantity supplied, and the price will ________.

The number of people looking to buy ceiling fans increases, so there is an increase in the

Teenagers drink more soft drinks than other age groups. If the number of teenagers increases, everything else remaining the same,

If macaroni and cheese is an inferior good, then a decrease in income results in

If both producers and consumers believe that a product's price will rise in the future, then in the present, the equilibrium price

Because of a sharp increase in the price of petrol, the demand for Sports Utility vehicles (SUVs) has decreased. So, the high price of petrol leads to a

Which of the following leads to an increase in the quantity supplied, but not an increase in supply?

The graph illustrates the market for bottled water. If the producers of bottled water switch to using improved technology, then the

A rise in the price of a substitute in production for a good leads to

Advances in productivity increase supply because they might

Getting Started

The Australian and Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Suppose the equilibrium price of movie tickets is $10. If the supply curve for movies shifts , the equilibrium price will .

If there is a surplus of a good, the quantity demanded is the quantity supplied, and the price will .